Bettendorf Metal Wheel Co. v. P. P. Mast & Co.

Citations

• 187 F. 590
• 109 C.C.A. 420
• 1911 U.S. App. LEXIS 4205

Syllabus

<p>Trusts (§ 35S*) — Following Trust Funds — Insolvency oe Trustee.</p> <p>Insolvent, being indebted to intervener prior to the institution of receiver prcxjeeclings. assigned certain accounts to secure the indebtedness, under an agreement to collect the accounts and i>ay the same in liquidation of intervener’,s claim. The insolvent, out of the proceeds collected' from such assigned claims, misappropriated and used in its business $5,625.93, of which $2,517.19 was expended for labor, $539.62 for materials, $691.62 for general expenses, and $1,S77.50 was paid on bills payable in settlement of past-due accounts. The labor and material were used in making products manufactured by the insolvent. Hold, that with reference to no part of such misapplied assets was it sufficiently shown by such facts that the body of the assets coming into the hands of the receiver had been augmented thereby, and that there was therefore no such following of the trust fund as would entitle intervener 'to a preference for the assets so misapplied.</p> <p>[I5d: Note. — For other cases, see Trusts, Cent. Dig. § 553; Dee. Dig. § 358.*]</p>